A trail of ‘bloody gold’ leads to Venezuela’s government

Fifty meters underground, the air is hotter than at the surface. The humidity is overwhelming and you can smell the stench of the dozens of men who have already spent half their day down here, inside one of hundreds of gold mines deep in the jungle in southern Venezuela.Venezuela boasts the largest oil reserves in the world, but gold is increasingly its lifeblood. In the area around the mines, gold has replaced the near-worthless bolivar, with even the cost of a haircut quoted in gold. In Caracas, it allows Maduro to allegedly buy the military's loyalty to his embattled government. And abroad, Venezuelan gold is sold by the ton — one of the country's few remaining means of foreign exchange.To extract the precious metal, these men must turn rocks into dust, from sunrise to sunset, under the brutal rule of a state-sponsored network of violent gangs and corrupt military, say several witnesses and a senior military source with knowledge of the security situation in the Orinoco Mining Arc."Just like the blood diamonds [in Africa], the gold that is being extracted from Venezuela, outside of any protocol, is bloody gold," General Manuel Cristopher Figuera, the former head of Venezuela's intelligence service told us.

Welcome to the Orinoco Mining Arc

Rojas moved here three years ago, when oil prices hit a 12-year-low. Such drops in oil prices, compounded by years of mismanagement and corruption, were already pushing Venezuela's state-run oil industry to near-collapse — and the national economy along with it. Progressive US sanctions have tightened the vice, forcing the government to find alternative sources of revenue.In November 2018, embattled president Nicolas Maduro announced a "Gold Plan" that would allow Venezuela to profit an estimated $5 billion dollars annually, starting in 2019. "Gold will strengthen our international reserves and it will strengthen the national finances," he said, claiming that his government had been negotiating with foreign investors to sell the valuable mineral. "Welcome to the Orinoco Mining Arc and the Gold Plan, all investors worldwide," he said. Most of the country's gold reserves are thought to lie in Orinoco Mining Arc, Bolivar state. It is a vast stretch of land, most of it jungle, that spans more than 40,000 square miles from Guyiana to Colombia.The three hour drive from the airport in Puerto Ordaz to the city of El Callao, considered locally as the mining industry's capital, is incredibly scenic, with lush terrain as far as the eye can see. Food and fuel sellers dot the journey, usually near small towns lost in the wilderness. The further into the jungle, the more expensive these goods get. The road is surprisingly well paved — an indication of how well travelled it is — but not without its perils.Venezuela Fast FactsEl Callao is the most violent municipality in Venezuela, according to the Venezuelan Observatory of Violence (VOV). The Roscio municipality, less than ten miles north in the town of Guasipati, came second. The reasons for the violence are many but they all begin with mining, which has attracted "armed groups, the presence of so called 'syndicates', coupled with the lethal and violent actions of police and military operatives in the area," VOV said in its 2018 annual report. We pass thirteen police checkpoints on the way in. It doesn't matter what we bring in — it's what comes out that these men are looking for.Empty road in Venezuela's Orinoco Mining Arc. In 2016, the government named Orinoco a "strategic development zone", which would facilitate the establishment of mining operations and allow it to receive special funding. It also bypassed local authorities and the opposition-controlled National Assembly, centralizing control in the country's Mining Ministry in Caracas, right under Nicolas Maduro. The move would boost Venezuela's economy by compensating for the fall in oil revenue, the government said.But the US says that some gold profits are just going into private pockets. Maduro, members of his family and his regime have been using this legal framework to direct illegal mining operations in the region, granting the Venezuelan military "liberal access" to mines in order to buy their "staunch loyalty", the US Department of Treasury said in March as it imposed sanctions on Venezuela's mining industry.Support from the military is the main reason Maduro has been able to remain in power. From Caracas to El Callao, there is little apparent interest from the armed forces in any type of change. "Maintaining the same leadership is a way of maintaining the same status quo," a senior military source with direct knowledge of the security situation in the Mining Arc tells us.The Venezuelan government did not respond to CNN's request for comment.

Criminal gangs and corruption

At the mine, Rojas shows us rocks with gold filaments, which must be extracted. "We take these rocks to the mill and there they are processed," explains another miner, Angel Coro, 48, a six-year veteran at the same mine. "The mills extract 40% of the gold from the rock," he says. "The other 60% stays in the crushed sand, which they sell to companies like (state-owned mining company) Minerven or other companies operating in the area, which process the sand with cyanide and other chemicals." "In some areas you can get 100, 150 grams of gold, every day," Coro tells us back at the mine, reminiscing about another area he had worked in. That's more than $6,000 worth of gold in just one day. The average salary in Venezuela is the equivalent of $6 per month. Most of these miners had other jobs before the collapse of Venezuela's economy. Some were mechanics, some were farmers and the list goes on. Now, they're doing better than the average Venezuelan, but they're far from getting rich. Miners must pay the mills to process the gold and then there are other, less transparent costs. When we ask who else they have to pay, they refuse to go into detail. Entryway to a goldmine visited by CNN in Venezuela's Orinoco Mining Arc. One miner is willing to say more, under condition of anonymity. We meet him in El Callao early in the morning, when most of his fellow miners are still asleep. His body is stiff, his hands are shaking and his voice is low — he is nervous. He could be killed for speaking to us. He's been working in the mines for five years, and explains that the area is run by criminal gangs called pranes, groups composed mostly of young men who battle each other for control of territory and charge the miners for everything they extract. Some groups charge a percentage ranging from 30% to 50%, others charge a flat rate, regardless of how much or how little the miners are able to dig out. "You are forced to pay because if you don't there is a consequence," the anonymous miner explains, detailing the atrocities he witnessed. "They'll cut you, torture you, and those who speak out are also mutilated, tortured, killed and thrown down the mining holes." He's seen colleagues mutilated, their hands and arms cut, their eyes plucked out for failing to pay these armed groups their share. Others simply go missing. "I've seen them kill people in the mines, sometimes 10 or 15 people at once," he says. According to him, they are permitted to run rampant as corrupt police and military officials collect their own payment.Goldminers underground in Venezuela's Orinoco Mining Arc. His allegations are confirmed by a senior military source who has direct knowledge of the security situation inside Venezuela's mining arc. Unlike the anonymous miner, he doesn't look nervous, though he too requests anonymity. The TV inside the café where we meet him is showing old movies and the volume is near maximum. It's so loud we have to lean in to listen to him — perhaps what he intended."In order to survive in that territory, you need to carry a weapon," the anonymous military source says, adding that the pranes members carry heavy weapons bought or stolen from the military. "This didn't use to happen in Venezuela," he says.Confiscated weapons and gold from alleged gangs in Bolivar state, near El Callao. Provided to CNN by a senior Venezuelan military source.There are other well-trained outlaw militias in the region, too. "You can spot them a mile away," he says. "Their posture, their behavior is different. They are combat trained."Gold oils the relationships between criminal groups and the soldiers who are supposed to uphold the law. "I've been offered gold many times," our source says. "Every time we stopped a truck for a check, for not having the right paperwork someone would make me an offer to try to get me to look the other way"."Sometimes I did," he adds.

The military and Maduro's family

Members of the military are themselves invested in the dozen or so companies that refine gold from sand, the anonymous miner and military source both tell CNN. The resulting network of relationships between private industry and public officials leads to Caracas, where Maduro and his government exert direct control over both mining operations and the military."Everything, directly or indirectly, goes to the government," says one gold trader in El Callao, on condition of anonymity. "The environment is completely controlled by the government." Our anonymous military source says that high-ranking Venezuelan military officials take advantage of their rank to seize huge swaths of land, and then partner with investors who bring the knowledge and capital to run an industrial mining operation. These companies are able to operate freely in this turbulent region because of their connections to the top, he adds, and their operations legitimize criminal gangs' exploitation of thousands of miners at the bottom. A goldminer in Venezuela's Orinoco Mining Arc. Miner holds a piece of rock, deep inside a mine in Venezuela's Orinoco Mining Arc.Letting officials profit from the gold business has allowed Maduro to "corrupt public servants and military officials in all power structures in order to perpetuate his rule," says Figuera, one of President Maduro's most trusted generals before joining the opposition movement. He describes a "society of accomplices" in the gold industry, enriching themselves at the expense of the Venezuelan people, including the miners working around El Callao. According to Figuera, Maduro's own family has also profited from the gold. "There are companies linked to Maduro's family circle that buy the gold or negotiate the extraction of the gold in the south of the country," Figuera claims. "They sell one part to the central bank and the other part they take out of the country without any kind of control," he says.The US has also accused the embattled president and members of his family of personally profiting from mining operations, though the sanctions do not mention the Orinoco Mining Arc specifically.A former fixture in Maduro's inner circle, Figuera's own reputation is not unsullied. He took charge of the Venezuelan National Intelligence Service known as SEBIN, at the end of 2018, and was later sanctioned by the US Department of the Treasury for overseeing "mass torture, mass human rights violations, and mass persecution against those who want democratic change in Venezuela."He denies the charges and the sanctions were lifted after he turned on Maduro's government.

From the jungle to the city, from Caracas to the world

Venezuela's gold trail leads all the way up from the jungle to Venezuela's Central Bank. Surrounded by government buildings, it is here where the country's golden fortune has been amassed. According to a source inside the bank, around 70 tonnes of the valuable mineral remain inside its coffers, the lowest amount in decades. The Central Bank did not respond to a request for comment.Forced to provide some relief for a population starving under a crumbling economy, crippled further by US sanctions, which have made trade increasingly difficult, Maduro saw in gold the commodity that oil could no longer be: Increasingly prized, historically stable in value and considerably easier to ship around the world. Gold would allow the regime to suppress some of the country's needs while allegedly enriching Maduro and winning the military's favor. Read More – Source